Ottawa this month promised a price on carbon emissions by 2018 to
protect the environment, and will let provinces choose between a
tax or cap and trade system. Carbon pollution will cost C$10 a
tonne in 2018, rising C$10 a year until it reaches C$50 in 2022.

At C$50, it would raise fertilizer prices by C$2 per acre for
Canadian farmers, and some experts peg the total farm cost at
C$6, according to CIBC.

"Everyone is paying attention to this, especially in a downtime
for the (farm) economy," said Robin Speer, executive director of
Western Canadian Wheat Growers, which has gathered 2,500 petition
signatures opposing the tax.

Reduced soil tilling and use of more fuel-efficient machinery
have made Canadian farming more friendly to the environment, and
crops absorb carbon from the air and leave it in the ground,
Speer said.

Agriculture accounted for 10 percent of Canada's total greenhouse
gas emissions in 2014, behind the oil and gas, and transportation
sectors, which accounted for about one-quarter each, according to
Canada's environment department.

Nitrogen fertilizer producers, among major polluters in western
provinces, are leery of a carbon price. Agrium and CF Industries
will pay Alberta's provincial carbon tax of C$20 per tonne when
it takes effect next year.

Higher costs will discourage future expansion, and shift
production elsewhere, said Garth Whyte, chief executive of
industry group Fertilizer Canada. To prevent that, provinces
should credit fertilizer makers for reductions in nitrous oxide,
a byproduct of production, he said.

"Since Canadian plants are very efficient, the only way to
significantly reduce carbon emissions is to reduce production."

Canadian Agriculture Minister Lawrence MacAulay, asked whether a
carbon price would make farm products less competitive globally,
said provinces have options for using carbon revenue.

"It could be (used) to reduce taxes, in innovation, it could be
to help farmers make sure the product they produce is less
expensive," he said on Oct. 7.

British Columbia, which already charges a carbon tax, gives
farmers an exemption on farm fuel purchases. Alberta plans to do
the same.

Manitoba will recognize farm sector concerns in its plan, which
is under development, said Sustainable Development Minister Cathy
Cox.

(Reporting by Rod Nickel in Winnipeg, Manitoba; Editing by David
Gregorio)

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